Indian Economy is taking a huge hit due to the various geo-political concerns and reduced corporate earnings. Adding to the woes, Foreign investors are pulling off their investments from the indian markets.
In September, Rs 11,000 crores of money has been pulled out from the stocks. Reasons cited are the same Geo-political concerns and low corporate earnings. In August, a similar trend was observed where the foreign investors pulled out nearly 13000 crores from equities.
Besides, India’s GDP growth slowed to 5.7 per cent in the first quarter of 2017-18 amid concerns over disruption in business activity due to issues in GST implementation. Further, corporate earnings registered a negative growth in the same quarter, pushing back recovery and heightening concerns on expensive valuation.
Dinesh Rohira, CEO at 5nance.com, said the Foreign Portfolio Investors (FPIs) have been looking to re-balance their portfolios in search of better returns, hence shifting their money from the over-valued Indian stocks to some of the other under-valued emerging markets like Hong Kong.
With the demonetization and GST impacting the small and medium businesses, this foreign investment pull off is adding more concerns to the already bleeding Indian Economy. Impact of those government polices are not short term and the pinch can be felt for long term before indian economy is stabilized. American dollar is strengthening against Indian rupee which is another concern in the market.